Optical spectroscopy of small metal particles is an important issue in physics and chemistry. The unique[unreadable] optical properties of nanometer-sized particles make them attractive in a variety of biomedical applications[unreadable] such as biosensors or drag delivery implants. Silver and gold nanoparticles with biomolecules adsorbed at[unreadable] the surface are used to identify specific DNA sequences in colloidal solutions. Rapid changes in optical[unreadable] characteristics that accompanies interaction of a nanoparticle with a DNA provides a fast and reliable[unreadable] method of detecting very low concentrations of various biological substances including harmful agents such[unreadable] as anthrax, smallpox, ebola virus, etc. Optical properties of nanoparticles are sharply distinct from those of[unreadable] the bulk metal and are dominated by a collective electron excitation - surface plasmon. It has also been[unreadable] established that a strong electron confinement in these nanostructures has a profound effect on fundamental[unreadable] physical processes such as electron-electron and electron-phonon interactions. These interactions govern[unreadable] the electron dynamics in nanoparticles on subpicosecond time scale which has been investigated using[unreadable] ultrafast nonlinear optical spectroscopy during past several years.[unreadable] We propose to perform theoretical and numerical investigations of the optical properties and electron[unreadable] dynamics in metal nanoparticles and nanoshells, as well as in nanobiomolecular systems with various[unreadable] organic molecules adsorbed on the nanoparticle surface. These structures have have recently attracted[unreadable] tremendous interest due to the tunability of their optical properties which makes them very promising[unreadable] candidates for biomedical applications. Although a substantial experimental work has been done on electron[unreadable] dynamics in nanoshells and nanoshell aggregates, no systematic theoretical description has been developed[unreadable] so far. We will investigate the effect of quantum confinement on various optical characteristics of noble-metal[unreadable] nanoparticles with molecular adsorbates. We will employ density-functional methods to investigate surface[unreadable] local field and their effects on linear and nonlinear optical properties, such us resonance fluorescence and[unreadable] second harmonic generation, that determine optical spectroscopy of hybrid systems. We will also investigate[unreadable] optical properties of recently manufactured metal nanoshells focusing on the effect of nanoshell size and[unreadable] geometry on the electron-electron and electron phonon interactions.